International Energy Agency (IEA) released its second annual Medium-Term Renewable Energy Market Report (MTRMR) forecasting that power generation from hydro, wind, solar and other renewable sources worldwide will exceed that from gas and be twice that from nuclear by 2016.
According to the MTRMR, despite a difficult economic context, renewable power is expected to increase by 40% in the next five years. Renewables are now the fastest-growing power generation sector and will make up almost a quarter of the global power mix by 2018, up from an estimated 20% in 2011. The share of non-hydro sources such as wind, solar, bioenergy and geothermal in total power generation will double, reaching 8% by 2018, up from 4% in 2011 and just 2% in 2006.
“The rapid rate of growth of renewables, at least in the electricity sector, is very much in line with that needed to stay on the trajectory associated with IEA low-carbon energy scenarios,” said IEA Executive Director Maria van der Hoeven.
The challenge to international climate targets, however, has been a simultaneous surge in the growth of fossil fuels. The growth in supply from North American tight oil and gas producers coupled with demand growth in developing countries means that despite technological development and international efforts, the carbon intensity of the global energy supply has barely changed over the past 20 years, van der Hoeven said.
In this context, she said, “the rapid growth of renewables continues to beat expectations and is a bright spot in an otherwise bleak assessment of global progress towards a cleaner and more diversified energy mix.”
The leading factors of the success
Two are the main factors driving the positive outlook for renewable power generation. First, investment and deployment are accelerating in emerging markets, where renewables help to address fast-rising electricity demand, energy diversification needs and local pollution concerns while contributing to climate change mitigation. Led by China, non-OECD countries are expected to account for two-thirds of the global increase in renewable power generation between now and 2018. Such rapid deployment is expected to more than compensate for slower growth and smooth out volatility in other areas, notably Europe and the US.
Second, in addition to the well-established competitiveness of hydropower, geothermal and bioenergy, renewables are becoming cost-competitive in a wider set of circumstances. For example, wind competes well with new fossil-fuel power plants in several markets, including Brazil, Turkey and New Zealand. Solar is attractive in markets with high peak prices for electricity, for instance, those resulting from oil-fired generation. Decentralised solar photovoltaic generation costs can be lower than retail electricity prices in a number of countries.